Four Scenarios When You Need Non-Owner Car Insurance

You don’t own a car, but you still need car insurance. Wait, what?

This sounds like the worst of both worlds, but having non-owner auto insurance can help you save money in the long run. Non-owner car insurance is a special kind of policy that gives you liability coverage when you’re borrowing, renting or sharing a car.

The good news is that this type of insurance is pretty affordable. Ron Moore, the senior product manager for MetLife Auto & Home, tells Bankrate that premiums typically cost half as much as regular car insurance. If you’re a high-risk driver, however, you’ll pay more.

Here are four scenarios when you may need non-owner car insurance.

1. Non-Owner Car Insurance for Borrowed Cars

You often borrow your roommate’s Civic to get to work, and you should be covered by his insurance while you’re driving the car. The problem is, your roommate is notoriously cheap, and he only carries state minimum car insurance. That means if you cause an accident, you may have to pay extra for the damage to the other car, or for any injuries the other driver suffers.

You don’t want to risk being responsible for someone’s huge medical bill. Here, non-owner car insurance is a wise way to protect yourself. Keep in mind, however, that non-owner’s insurance is liability only. That means it covers the other driver’s injuries and vehicle damage, but not yours.

2. Non-Owner Car Insurance When You’re Between Cars

Your beloved WRX just died with 230,000 miles on the odometer, but you don’t have the cash for a new car. You refuse to buy a total beater — it’s got to be another Subaru, or nothing — so it’s going to take a few months to save up enough money for the down payment. While you’re between cars, it might be a good idea to get non-owner car insurance.

But why? You’d rather take the money you’d spend on insurance premiums and put it in your new-car-fund jar. However, if you let your insurance lapse, even for just a few months, you’ll wind up paying much higher premiums once you reinstate it, and insurers may be reluctant to cover you. The increase will shrink over time, but you’re still losing money. Find a non-owner car insurance policy and avoid the lapse.

3. SR-22 Non-Owner Car Insurance

You totaled your car in a DUI accident and can’t afford to buy a new one. Even though you don’t own a car, you’re told you need to carry car insurance in order to keep your driver’s license, because of your SR-22 status. It’s not fair, but that’s the way it is — so you have to find a non-owner car insurance policy.

It won’t be super cheap, but at least non-owner insurance is less expensive than conventional SR-22 insurance. In most states, you’ll have to carry SR-22 insurance for three years. Grit your teeth, be patient and remember that eventually, your record will be clear. And of course, you’ll never drink and drive again.

4. Non-Owner Car Insurance for Rental Cars or Car-Sharing Services

You live in a big city and use public transportation to get around. Who needs a car? Well… you do, sometimes, for grocery runs and Ikea buying sprees. If you use a car-sharing service, like Zipcar, do you need non-owner car insurance?

It might be a good idea. Zipcar members who are 21 or older, and who joined on or after March 1, 2015, automatically get liability coverage that includes $100,000 bodily injury per person, $300,000 bodily injury maximum and $25,000 property damage. That sounds like a lot, but it’s really not. Hit an expensive car, or cause injuries to multiple passengers, and the bills add up quickly.

“So let’s say there’s a million-dollar judgment against you. Will the lawyer for the person you have hurt or the family of someone you have killed settle for the $300,000 that Zipcar covers and then simply go away?” the New York Times asks. You can probably guess the answer.

You might also want to buy non-owner insurance if you frequently rent cars. Your credit card may include a collision damage waiver to cover damage to a rental car, but you still need liability coverage. Having your own car insurance coverage can save you money over buying the rental car company’s liability insurance, but run the numbers before you commit.

Whatever kind of car insurance you need, don’t buy blindly! Compare rates first on compare.com. You can get multiple free car insurance quotes in minutes.